In January 2023, a slight decrease in prices was recorded in Vilnius and Panevėžys
The Ober-Haus Apartment Price Index (OHBI) in Lithuania, which records changes in apartment prices in five major Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), fell by 0.1% in January 2023 (the price index in December 2022 remained unchanged). The apartment prices in the major cities of Lithuania have increased by 17.1% over the last 12 months (the annual growth in December 2022 was 20.4%).
In January 2023 apartment sales prices decreased in Vilnius and Panevėžys by 0.2% and 0.3% respectively, and the average prices per square meter were EUR 2,540 (-6 EUR/sqm) and EUR 1,057 (-3 EUR/sqm) respectively. In Kaunas and Klaipėda, apartment sales prices increased by 0.2% and 0.3% respectively, and the average prices per square meter were EUR 1,694 (+3 EUR/sqm) and EUR 1,605 (+4 EUR/sqm) respectively. Apartment sales prices in Šiauliai remained unchanged and the average price per square meter was EUR 1.073.
Apartment prices rose year-on-year in January 2023 in all major cities of the country: 19.7% – in Vilnius, 14.1% – in Kaunas, 14% – in Klaipėda, 12.2% – in Šiauliai and 14% – in Panevėžys.
“The ongoing slack in the housing market has caused apartment sales prices to stagnate, however in recent months, a minor decrease has been recorded across the country. According to the State Enterprise Centre of Registers, in January 2023 around 1,600 older apartments were sold in Lithuania, 24% less than in January 2022. Over the last three months, the secondary apartment market has seen its biggest annual decline in market activity since the beginning of the war in Ukraine.
The significantly reduced market activity continues to limit the opportunities for sellers to increase property prices and those who want to sell their homes quickly have to accommodate the growing pressure from buyers to lower their prices. However, there are not many sellers currently in the market who are under pressure to sell their properties as soon as possible. As a result, only small fluctuations in sales prices have been recorded. Meanwhile, recent transactions show that buyers are reluctant to overpay for residential properties and often manage to negotiate additional discounts.
Currently, the general trend in price changes reminds us of 2014, when due to geopolitical tensions resulting from the annexation of Crimea, the overall expectations of the Lithuanian population and its businesses declined significantly. Housing market activity decreased, and the rise in apartment sales prices halted in H2 2014. However, when Russia invaded Ukraine in 2022, provoking the ongoing war, geopolitical tensions increased to record heights, creating a negative impact on the prospects for global economic development. The drawn-out military and economic confrontation between various countries directly affects the real estate market of our country, so this period of stagnation may be protracted,” noted Raimondas Reginis, Head of Market Research for the Baltic Countries at Ober-Haus.
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